Earnings fall 7.1 percent at Williams-Sonoma
Williams-Sonoma, parent of home decor chains Pottery Barn and West Elm, saw more challenges in the third quarter, but still recorded same-store growth at four of its retail banners.
Earnings were $27.07 million, down 7.1 percent from $29.14 million in the same quarter last year. Net sales rose 5 percent to $895.1 million compared with $852.8 million in the same period last year.
The increase in sales was driven by new store openings -- the company opened 15 net new stores in the third quarter, representing a 5.6 percent gain in total retail square-footage. “Net revenues generated in the West Elm, Pottery Barn Kids, Williams-Sonoma Home and Pottery Barn brands were the primary contributors to the year-over-year revenue increase,” the company said.
In same-store sales, the company saw a gain of 0.3 percent respectively at both Williams-Sonoma and Pottery Barn retail stores. Same-store sales jumped 4.5 percent at Pottery Barn Kids stores and 2 percent at the company’s outlet stores.
"The home furnishings environment in the third quarter continued to be very challenging,” said Howard Lester, chairman and CEO, “particularly in the areas of the country where housing-related macro issues have had the greatest impact. Despite these challenges, however, we delivered positive top-line growth in all our brands.”
Direct-to-consumer net sales, including catalog and Internet sales, rose 5 percent to $400.9 million from $381.9 million in the previous year. Internet sales alone accounted for $266.3 million, a 17.2 percent increase from $227.3 million last year.
In the fourth quarter, Lester commented that the company believes it will see the “overall macro environment is having a greater impact on retail traffic than we previously anticipated.”
“This premise was confirmed by the disappointing October comparable-store sales results that were reported earlier this month by most other retailers,” he said. “But while this is a real concern, our strategic focus all year has been on 'traffic-generating' merchandising and marketing initiatives.”
Williams-Sonoma operates 597 stores in the United States, seven mail order catalogs and six e-commerce Web sites.